Bo Peabody has a nice piece in the WaPo about the business models of Social Networks. He's a bit more dour about their monetization schemes than I would venture, but generally is in the ballpark. A visit from the pope may attract a large audience, but it's not a great place to make money. Likewise, social networks can successfully bring people together, but don't expect them to turn a profit Peabody cites examples of the failure of both advertising models on social networks, and the inability of social networks to get subscribers to pay for their services. Peabody cites the experience of Tripod (a once moderately sized social network which Peabody created), and reveals that the ad revenue generated on the site was never a fraction of a percent of that which Google hauls in with targeted search ads. This is not necessarily a failure of a social networking ad model, but a failure of the size and intelligence of the social network. I imagine that Facebook's targeted ads,
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Commentary from the Crossroads of Technology and Culture.